Centrus Energy Corp. (LEU) Bundle
A Brief History of Centrus Energy Corp.
Centrus Energy Corp., a Delaware corporation, primarily operates in the nuclear fuel industry, providing enriched uranium and related services. The company's operations are divided into two main segments: Low-Enriched Uranium (LEU) and Technical Solutions.
Financial Performance (2024)
For the nine months ended September 30, 2024, Centrus reported total revenues of $290.4 million, up from $216.6 million in the same period of 2023, marking a 34% increase. This growth was driven by significant increases in both the LEU and Technical Solutions segments.
| Segment | Revenue (2024) | Revenue (2023) | $ Change | % Change |
|---|---|---|---|---|
| LEU | $228.0 million | $186.9 million | $41.1 million | 22% |
| Technical Solutions | $62.4 million | $29.7 million | $32.7 million | 110% |
The LEU segment's revenue was primarily generated from the sale of the SWU component of LEU, natural uranium hexafluoride, and enriched uranium products. In the nine months ended September 30, 2024, SWU revenue was $198.1 million, an increase of 34% compared to $147.4 million in 2023.
Cost of Sales and Gross Profit
Cost of sales for the nine months ended September 30, 2024, totaled $240.7 million, compared to $154.3 million in 2023, reflecting a 56% increase. The gross profit was $49.7 million, down from $62.3 million, representing a decrease of 20% year-over-year.
| Segment | Cost of Sales (2024) | Cost of Sales (2023) | Gross Profit (2024) | Gross Profit (2023) |
|---|---|---|---|---|
| LEU | $189.3 million | $126.1 million | $38.7 million | $60.8 million |
| Technical Solutions | $51.4 million | $28.2 million | $11.0 million | $1.5 million |
Net Income and Comprehensive Income
For the nine months ending September 30, 2024, net income was $19.5 million, a decrease of 31% from $28.1 million in 2023. The decline was attributed to lower gross profits in the LEU segment and increased income tax expenses.
Backlog and Future Prospects
As of September 30, 2024, Centrus reported a backlog of approximately $2.8 billion in the LEU segment, up from $1.0 billion in December 2023. This backlog includes contracts for future SWU and uranium deliveries and is a significant indicator of the company's future revenue potential.
| Backlog Segment | Backlog (September 30, 2024) | Backlog (December 31, 2023) |
|---|---|---|
| LEU | $2.8 billion | $1.0 billion |
| Technical Solutions | $0.9 billion | $1.0 billion |
Market Conditions and Challenges
Market conditions have been influenced by geopolitical events, including sanctions and trade restrictions. The Import Ban Act, enacted in May 2024, restricts the importation of LEU from Russia, which may impact Centrus's supply chain and pricing strategies.
Pension and Benefits Changes
In 2024, Centrus entered into a group annuity contract for its defined benefit pension plans, transferring approximately $234 million of pension obligations to an insurer. This deal is aimed at stabilizing the company's future pension liabilities and managing costs effectively.
Liquidity and Capital Resources
As of September 30, 2024, Centrus had cash and cash equivalents totaling $194.3 million and restricted cash of $29.8 million related to inventory loans. The company anticipates adequate liquidity to support operations for at least the next 12 months.
This financial overview provides a snapshot of Centrus Energy Corp.'s performance and strategic positioning in 2024 amid evolving market conditions and operational challenges.
A Who Owns Centrus Energy Corp. (LEU)
Major Shareholders
As of 2024, Centrus Energy Corp. (LEU) has a diversified ownership structure that includes institutional investors and individual shareholders. The following table outlines the major shareholders and their respective ownership percentages:
| Shareholder | Ownership Percentage | Number of Shares Owned |
|---|---|---|
| BlackRock, Inc. | 11.5% | 1,900,000 |
| The Vanguard Group, Inc. | 10.2% | 1,700,000 |
| State Street Corporation | 8.0% | 1,300,000 |
| Geode Capital Management, LLC | 4.5% | 700,000 |
| Other Institutional Investors | 25.0% | 4,000,000 |
| Insider Ownership | 5.0% | 800,000 |
| Public Float | 36.8% | 5,900,000 |
Stock Performance
The stock performance of Centrus Energy Corp. has shown significant fluctuations over the past year. As of early 2024, the stock price has ranged from a low of $10.50 to a high of $29.75. The price as of the latest trading session was approximately $25.00 per share.
Financial Overview
Centrus Energy Corp. reported total revenue of $290.4 million for the nine months ending September 30, 2024, compared to $216.6 million for the same period in 2023. The gross profit for the same period was $49.7 million, down from $62.3 million in the previous year. The company faced a net loss of $5.0 million for the three months ending September 30, 2024, following a net income of $8.2 million for the same period in 2023.
Recent Developments
Centrus Energy Corp. has been awarded contracts by the Department of Energy (DOE) for its HALEU Operation Contract, which has a base value of approximately $150 million, with additional phases potentially raising the value to $90 million. The operational phase is expected to produce 900 kilograms of HALEU UF6 per year.
Market Position and Future Outlook
Centrus Energy is positioned as a critical supplier in the nuclear fuel market, particularly in light of recent geopolitical tensions affecting uranium supply chains. The company is actively pursuing new contracts to expand its market share and improve its financial performance.
Ownership Structure Summary
The ownership structure of Centrus Energy Corp. is characterized by a combination of institutional investors, insider holdings, and public float. As of 2024, the approximate distribution is as follows:
| Ownership Type | Percentage |
|---|---|
| Institutional Investors | 45.7% |
| Insiders | 5.0% |
| Public Float | 49.3% |
Centrus Energy Corp. (LEU) Mission Statement
Centrus Energy Corp. aims to be a trusted supplier of nuclear fuel components and services for the nuclear power industry, providing a reliable source of carbon-free energy. The company operates with the goal of delivering value through the reliability and diversity of its supply sources. Centrus is focused on supporting the deployment of advanced nuclear technologies to meet the growing demand for clean energy solutions.
Business Segments
Centrus operates through two primary segments:
- LEU Segment: Supplies enriched uranium and its components to commercial customers.
- Technical Solutions Segment: Provides advanced engineering, design, manufacturing, and services.
Financial Performance Overview
For the nine months ended September 30, 2024, Centrus reported the following financial metrics:
| Segment | Revenue ($ million) | Cost of Sales ($ million) | Gross Profit ($ million) |
|---|---|---|---|
| LEU | 228.0 | 189.3 | 38.7 |
| Technical Solutions | 62.4 | 51.4 | 11.0 |
| Total | 290.4 | 240.7 | 49.7 |
Revenue Breakdown
The revenue from the LEU segment is primarily derived from:
- Sales of Separative Work Units (SWU)
- Sales of natural uranium hexafluoride
- Sales of enriched uranium products
Revenue from the LEU segment accounted for approximately 79% of total revenue for the nine months ended September 30, 2024.
Key Financial Metrics
As of September 30, 2024, Centrus reported:
| Metric | Value |
|---|---|
| Net Income ($ million) | 19.5 |
| Cash and Cash Equivalents ($ million) | 194.3 |
| Working Capital ($ million) | 200.0 |
| Total Backlog ($ billion) | Approximately 3.7 |
Market Trends and Challenges
The nuclear fuel market is currently undergoing significant changes due to geopolitical factors, particularly the impact of the war in Ukraine. As of September 30, 2024, spot prices for SWU reached $180, reflecting a substantial increase from previous lows.
Centrus faces challenges related to supply chain disruptions and the evolving regulatory landscape, particularly concerning uranium imports from Russia.
Future Outlook
Centrus Energy Corp. is positioned to capitalize on the increasing demand for nuclear energy as a clean power source. The company continues to explore opportunities for growth through both organic initiatives and strategic partnerships in the nuclear sector.
How Centrus Energy Corp. (LEU) Works
Business Segments
Centrus Energy Corp. operates through two primary segments: the LEU segment and the Technical Solutions segment. The LEU segment focuses on supplying enriched uranium components, while the Technical Solutions segment provides advanced engineering and manufacturing services.
LEU Segment
The LEU segment is the major revenue driver for Centrus, involving the sale of enriched uranium and related components to utilities operating nuclear power plants. This segment generated $228.0 million in revenue for the nine months ended September 30, 2024, compared to $186.9 million for the same period in 2023, reflecting a 22% increase.
| Category | 2024 (9 months) | 2023 (9 months) | Change ($) | % Change |
|---|---|---|---|---|
| SWU Revenue | $198.1 million | $147.4 million | $50.7 million | 34% |
| Uranium Revenue | $29.9 million | $39.5 million | ($9.6 million) | (24%) |
| Total Revenue | $228.0 million | $186.9 million | $41.1 million | 22% |
| Cost of Sales | $189.3 million | $126.1 million | $63.2 million | 50% |
| Gross Profit | $38.7 million | $60.8 million | ($22.1 million) | (36%) |
Technical Solutions Segment
The Technical Solutions segment reported revenues of $62.4 million for the nine months ended September 30, 2024, compared to $29.7 million in 2023, marking a substantial increase of 110%.
| Category | 2024 (9 months) | 2023 (9 months) | Change ($) | % Change |
|---|---|---|---|---|
| Total Revenue | $62.4 million | $29.7 million | $32.7 million | 110% |
| Cost of Sales | $51.4 million | $28.2 million | $23.2 million | 82% |
| Gross Profit | $11.0 million | $1.5 million | $9.5 million | 633% |
Cost Structure and Profitability
The total cost of sales for Centrus during the nine months ended September 30, 2024, was $240.7 million, up from $154.3 million in the previous year, representing a 56% increase. This rise in costs was driven by increased SWU costs and higher operational expenditures in the Technical Solutions segment.
Market Position and Pricing
As of September 30, 2024, the spot price for SWU reached $180, an increase of 16% since the beginning of the year and a significant rise from the 2018 low of $34. The company’s backlog for the LEU segment is valued at approximately $2.8 billion, indicating strong future revenue potential.
Financial Performance
For the three months ended September 30, 2024, Centrus reported a net loss of $5.0 million compared to a net income of $8.2 million in the same period of 2023. The decrease in profitability was attributed to a lower gross profit margin and increased costs across both segments.
| Financial Metrics | 2024 (Q3) | 2023 (Q3) |
|---|---|---|
| Net Income (Loss) | ($5.0 million) | $8.2 million |
| Gross Profit | $8.9 million | $11.3 million |
| Operating Income (Loss) | ($7.6 million) | ($2.9 million) |
Liquidity and Capital Resources
As of September 30, 2024, Centrus held cash and cash equivalents of $194.3 million, with an additional $29.8 million in restricted cash. The company anticipates sufficient liquidity to support operations for at least the next 12 months, driven by expected customer collections and ongoing contracts.
Future Outlook
Centrus continues to seek public and private funding to expand its uranium enrichment capacity at the Piketon, Ohio facility, essential for meeting future demand for enriched uranium. The company is also focused on growing its Technical Solutions segment, which has shown significant revenue growth and profitability potential.
How Centrus Energy Corp. (LEU) Makes Money
Business Segments
Centrus Energy Corp. operates primarily through two segments: the LEU segment and the Technical Solutions segment.
- The LEU segment focuses on supplying enriched uranium components essential for nuclear fuel, which is primarily sold to utilities operating commercial nuclear power plants.
- The Technical Solutions segment provides advanced engineering and technical services, including uranium enrichment services under government contracts.
Revenue Generation
As of September 30, 2024, Centrus reported total revenue of $290.4 million, a substantial increase of 34% compared to $216.6 million in the same period in 2023. This revenue is derived from both segments as follows:
| Segment | Revenue (2024) | Revenue (2023) | $ Change | % Change |
|---|---|---|---|---|
| LEU Segment | $228.0 million | $186.9 million | $41.1 million | 22% |
| Technical Solutions Segment | $62.4 million | $29.7 million | $32.7 million | 110% |
| Total Revenue | $290.4 million | $216.6 million | $73.8 million | 34% |
LEU Segment Details
Within the LEU segment, revenue is generated primarily through:
- Sales of Separative Work Units (SWUs): This component accounted for $198.1 million of the LEU segment's revenue, representing a 34% increase from $147.4 million in 2023.
- Sales of Uranium: This component saw a decrease in revenue to $29.9 million from $39.5 million, a decline of 24% due to a reduction in sales volume.
The increase in SWU revenue can be attributed to a 33% rise in the average price of SWUs sold and a 2% increase in volume sold.
Technical Solutions Segment Details
The Technical Solutions segment's revenue surged by 110% to $62.4 million, primarily due to:
- HALEU Operation Contract: Revenue from this contract rose by $33.1 million as the company progressed from Phase 1 to Phase 2 of the contract.
Cost of Sales
The total cost of sales for Centrus was $240.7 million, up 56% from $154.3 million in the previous year. Breakdown by segment includes:
| Segment | Cost of Sales (2024) | Cost of Sales (2023) | $ Change | % Change |
|---|---|---|---|---|
| LEU Segment | $189.3 million | $126.1 million | $63.2 million | 50% |
| Technical Solutions Segment | $51.4 million | $28.2 million | $23.2 million | 82% |
| Total Cost of Sales | $240.7 million | $154.3 million | $86.4 million | 56% |
The increase in costs was driven by higher SWU costs, which rose due to a 75% increase in the average unit cost despite a modest increase in volume sold.
Gross Profit
Gross profit for the company decreased to $49.7 million, down 20% from $62.3 million in the previous year. This decline is attributed to the increased cost of sales outpacing the revenue growth.
Major Customers
In the nine months ended September 30, 2024, significant revenue contributions came from major customers in both segments:
- LEU segment customers contributed $69.3 million, $42.3 million, $35.4 million, and $30.2 million respectively.
- In the Technical Solutions segment, a customer contributed $60.3 million.
Backlog and Future Outlook
The backlog for the LEU segment as of September 30, 2024, was approximately $2.8 billion, indicating a strong pipeline of future revenue. The Technical Solutions segment backlog stood at approximately $0.9 billion.
Future revenues will also depend on the company's ability to secure public and private funding for enrichment capacity expansion, especially in light of recent geopolitical developments affecting uranium supply.
Net Income and Financial Position
For the three months ended September 30, 2024, Centrus reported a net loss of $5.0 million, compared to a net income of $8.2 million for the same period in 2023. As of September 30, 2024, the company had cash and cash equivalents of $194.3 million.
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Article updated on 8 Nov 2024
Resources:
- Centrus Energy Corp. (LEU) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Centrus Energy Corp. (LEU)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Centrus Energy Corp. (LEU)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.